96,000 Jobs Added in August, Unemployment Drops to 8.1 Percent

Written by Dean Baker

Friday, 07 September 2012 10:00

The economy added 96,000 jobs in August, roughly the pace needed to keep even with the growth of the labor force, according to the Bureau of Labor Statistics' latest employment report. The unemployment rate also dropped to 8.1 percent, but this was entirely due to a drop in the labor force as the reported employment in the household survey edged downward. There was more negative news in the household survey: The jobs numbers for June and July were also both revised down by roughly 20,000 bringing the three month average to 94,000, and the employment-to-population ratio (EPOP) dropped 0.2 percentage points to 58.3 percent.

But there were a couple of bright spots. The percentage of unemployment due to people voluntarily quitting their jobs, a measure of workers’ confidence in the labor market, rose to 7.5 percent, putting it near the winter levels. Also, the number of workers involuntarily working part-time, as well as the number of discouraged workers, both fell, pushing the broad U-6 measure of labor market slack to its lowest point since January of 2009. Undoubtedly some seasonal factors depressed August’s job number. While September will likely show a better story, job growth is barely fast enough to keep pace with the growth of labor force.